SOCIAL NETWORKING site Bebo has been spared the axe after parent AOL sold it to a US turnaround specialist just two years after buying it for $850 million.
The deal with Criterion Capital comes two months after AOL said it was unwilling to put up the “significant investment” needed in Bebo, which was threatened with closure unless a buyer was found.
Bebo was a success in Ireland and Britain but flopped in the US against competition from Facebook. It is likely to have been sold for just a fraction of the purchase price. AOL refused to comment on the price but said the deal would create a “meaningful tax deduction” – implying a big loss.
AOL chief executive Tim Armstrong said: “The deal will allow Bebo’s users to remain within the social platform that they know and love, while enabling a new owner to bring new possibilities and experiences to bear.”
Bebo was launched in 2005.
The sale to AOL – which was then part of Time Warner – netted a major windfall for Michael and Xochi Birch, who reportedly owned about 70 per cent of the firm at the time of the takeover.
As of April, San Francisco-based Bebo had 12.6 million unique users, 4.4 million of whom were in the UK. The UK users were responsible for generating well over half of the social networking site’s 1.9 billion page impressions a month.
Criterion managing partner Adam Levin said: “The young, highly active user base, revenue history, presence in countries throughout the world and solid technical infrastructure make it an attractive media platform both as a standalone entity and in the context of our broader investment objectives.”
Mr Armstrong added: “Criterion . . . are well placed to drive Bebo’s effort to strengthen its foothold within the highly competitive social networking arena.” – (PA)
